Why aren’t you getting the financial information that you need?
It never ceases to amaze me why SMEs cannot produce management accounts within a week of the period end. How do SMEs manage their businesses effectively without timely financial information like management accounts?
Businesses must use technology to the fullest to achieve the objective of timely accounting information. The underlying technology is readily available, often at no or minimal cost. So this cannot be the reason for tardiness.
Some of the factors that I see that hinder the achievement of this objective:
- Use of internal staff who don’t really understand accounts and a reluctance to replace and outsource staff
- Manual processing errors greatly hinder quick turnaround
- Leaving sales invoicing until the month end (seriously ! giving your customers up to an extra thirty days credit)
- Owners themselves who are the block on the flow of information (sitting on documentation, not answering queries, etc.)
- Working on the false economy that an investment in technology is too expensive
With the advent of bank feeds and AP data extraction technologies, there is no reason why SMEs cannot prepare their management accounts much more quickly.
Bank Feeds
Bank feeds are a revolutionary technology that allows financial transactions from bank accounts to be automatically imported into accounting software. This automation eliminates the need for manual data entry, significantly reducing the time and effort required to maintain up-to-date financial records. Working capital, income, and expenses can be monitored in real-time, enabling more timely and accurate financial decision-making.
AP Data Extraction
Accounts Payable (AP) data extraction technology takes automation a step further by intelligently capturing and processing invoices and other AP documents. This technology uses optical character recognition and machine learning algorithms to extract relevant data from documents. Once extracted, the data is automatically entered into the accounting system, streamlining the AP process. This not only accelerates the payment cycle but also minimises the risk of human error, ensuring that accounts accurate and reliable.
Embrace Technology!
The integration of bank feeds and AP data extraction technologies offers numerous benefits for SMEs including :
More Timely Management Information : Quicker processing means there is no reason why there can not be rapid turnaround of financial information.
Time Efficiency: Automation significantly reduces the time required to manage accounting records, freeing up valuable resources that can be redirected to work on rather than in the business.
Accuracy: The automated processes minimise human errors, leading to more accurate records and compliance with regulatory standards.
Improved Cash Flow Management: Real-time access to financial data enables better monitoring of cash flow, helping business make informed decisions about investments, expenses, and growth strategies.
Cost Savings: By reducing the need for manual data entry and processing, businesses can lower their operational costs and improve their bottom line.
Conclusion
Technological advancements have opened up new avenues for SMEs to manage accounting information more efficiently and accurately. By leveraging these technologies, businesses can enjoy significant time and cost savings, improved accuracy, timely information and better financial management. There is no longer any reason for SMEs to be held back by traditional accounting methods. Embracing modern financial technologies is the key to staying competitive and agile in today’s dynamic business environment.
Please feel free to contact me if you wish to discuss further.
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